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The Impact of Asian Players on the Revenue of Their Teams and Major League Baseball

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The Impact of Asian Players on the Revenue of Their Teams and Major League Baseball University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Masters Theses Graduate School 12-2005 The Impact of Asian Players on the Revenue of Their Teams and Major League Baseball Ji-Ho Kim University of Tennessee, Knoxville Follow this and additional works at: https://trace.tennessee.edu/utk_gradthes Part of the Sports Studies Commons Recommended Citation Kim, Ji-Ho, "The Impact of Asian Players on the Revenue of Their Teams and Major League Baseball. " Master's Thesis, University of Tennessee, 2005. https://trace.tennessee.edu/utk_gradthes/4585 This Thesis is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Masters Theses by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a thesis written by Ji-Ho Kim entitled "The Impact of Asian Players on the Revenue of Their Teams and Major League Baseball." I have examined the final electronic copy of this thesis for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Master of Science, with a major in Sport Studies. Dennie Kelley, Major Professor We have read this thesis and recommend its acceptance: Joy T. DeSensi, Gi-Yong Koo Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) To the Graduate Council: I am submitting herewith a thesis writtenby Ji-Ho Kim entitled ''The impact of Asian players on the revenue of their teams and Major League Baseball." I have examined the finalpaper copy of this thesis for form and content and recommendation that it be accepted in partial fulfillment of therequirements for the degree ·of Master of Science, with a major in SportStudies. We have read this thesis and recommend its acceptance: Accepted forthe Council: Dean of Graduate Studies THE IMPACT OF ASIAN PLAYERS ON THE REVENUE OF THEIR TEAMS AND MAJOR LEAGUE BASEBALL A Thesis Presented for the Master Of Science Degree The University Of Tennessee, Knoxville Ji-Ho Kim December 2005 11 Copyright© 2005 by Ji-Ho Kim, All rightsreserved iii Dedication This thesis is dedicated to my parents, Sung-Ki Kim and Boon-Ok Lim Who love and support me unconditionally. Without their encouragement and trust, I and this thesis would not exist. And to my two brothers and one sister, Ji-Yun Kim, Hyung-Chul Kim, and Hee-Jung Kim who willingly share all the memories, both good and bad, with me. iv Acknowledgements I would like to express appreciation to all of people who helped me complete this study. First of all, to Dr. Dennie Kelley, thank you for your support and consideration on not only this research, but also as my advisor. I would not have been able to complete this Master's degree without your countless support. To my other committee members, Dr. Joy DeSensi and Dr. Gi-Yong Koo, thank you for helping me improve my work. Your effortsand support have helped me greatly during the time as a graduate student. I would like to appreciate Seung-Yup Lim, Jong-II Choi and Adam Love. I believe that their help on this study was a crucial part of this research. I will miss times withthem in Knoxville. Once again, I really appreciate all of people who helped me to complete this research. V Abstract The purpose of this study is to examine the impact of Asian players, especially those from South Korea and Japan, on revenue changes of the Seattle Mariners, Los Angeles Dodgers and Major League Baseball (MLB). To gather data, the directors of Asian baseball operations fromthe Seattle Mariners, LA Dodgers and MLB were contacted via e-mail and telephone. In addition, two journalistsfrom the sports industry and two experts fromthe baseball industry were contacted via e-mail. Further, data showing MLB's and teams' revenue sources from Japan and South Korea were collected fromseveral sports websites. To investigate the impact of Asianplayers on their teams and on the MLB revenue change, this study focuseson answering the following three questions:a) Have there been any significantincreases in the revenue of MLB, the Seattle Mariners and Los Angeles Dodgers after acquiring Asian players? b) What are the additional revenue sources that canbe realized by acquiring Asian players? c) Have Asian players had a positive cost-benefiteffect? Descriptive analysis was used in interpreting the results of this study, and the results are shown by percentages, mean, tables, and figures. Further, comparison of collected secondary data shows the Seattle Mariners', the Los Angeles Dodgers' and MLB's revenue changes afterobtaining Asian players. The findings of the study show that obtaining Asian players was effective in increasing the two teams'and MLB's revenue. Additionally, revenue fromJapan was the most significant factor in this revenue increase. This study provides an opportunity to vi examine a new trend of the global sports industry and also can be a reference to MLB teams when they obtain Asian players. vu Table of Contents Chapter 1-Introduction ........................... ... .......................................... ....1 Statement of Purpose... ...... .............................. ........................... 2 Definition of Terms .................................................................... 2 Assumptions .................................... ........................................ 3 Sigt1ificance of Study ......... ......................................................... 4 Chapter 2-Literature Review ......................................................................5 Major League Baseball Teams' Revenue Structure ................................. 5 Major League Baseball Revenue Sharing System ..................................5 Asian Community in the U.S.. .......................................................6 Popularity and Background of Professional Baseball in South Korea and Japan ..................................................................... ...............8 Chapter 3-Methodology... ...........................................................................9 Collection of Data ....................................................................... 9 Data Analysis ............ .............................................................10 Limitations ................ ..............................................................10 Chapter 4-Results .................................................................................12 Research Question One..... .......................................................... 12 Research Question Two .............................. ................................ 12 Research Question Three ............................................................. 18 Chapter 5-Summary, Conclusions and Recommendations ............... ..................... 21 Summary.... ...................................... ...................................... 21 Conclusions .......................................................................... .... 22 Recommendations for Future Study .................................... .........24 List of References ................................................................................... 25 Appendices ...........................................................................................29 Appendix A Data Request E-mail.. ................................................. 30 Appendix B The Seattle Mariners' Attendance from 1995 to 2005 ........... 31 Appendix C The Los Angeles Dodgers' Attendance from1999 to 2005 .....32 Vita ............................................................................................... 33 viii List of Tables Table Page 1. The Seattle Mariners Payroll forJapanese Players (2000-2005).... ................ .......19 2. The LA Dodgers Payroll for Japanese/South Korean Players (1995-2005) ........ 20 lX List of Figures Figures Page 1. Number of MLB Players from South Korea/Japan........................ ................13 2. MLB's Total Revenue fromForeign Countries ..............................................14 3. Major League Baseball BRFs from Japan ................................................15 4. Major League Baseball BRFs from South Korea .......................................15 5. MLB Licensees in Japan ......................................................................... 16 6. Sponsorship with Japanese Companies........... ............................................ 17 7. Major League Baseball Salary Increases from 1990 to 2005 ..............................18 1 Chapter 1 Introduction Professional athletes' salaries have increased in recent years, and the average salary of Major League Baseball (MLB) players is $2.6 million in 2005 (Associated Press). In addition, "Approximately 53 to 55 percent of MLB teams' revenue goes to players' compensation at the major league level" (Zimballist 2003, p.127). To pay forthe high players' salaries and at the same time to make a profit, ticket prices have increased. In this respect, attracting sports fans in foreign countries may be an effective way to increase revenues. For example, according to Major League Baseball (MLB.com, 2005a), a record 29.2 percent of the players on Opening Day rosters - the 25- man active rosters and disabled lists were born outside the United States. That is up from 27.3 percent last year. The 242 players were from
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